Low Income Energy Assistance

Pursuant to a legislative requirement, GAO evaluated states' use of the Low-Income Home Energy Assistance (LIHEA) Block Grant, focusing on the effects of: (1) 1984 amendments to the block grant legislation; (2) budget reductions that the Balanced Budget and Emergency Deficit Control Act requires; and (3) a $2.1-billion oil overcharge settlement.

The 1984 amendments: (1) changed the fund allocation formula; (2) imposed additional restrictions on state eligibility criteria to promote program participation among poverty-stricken families not receiving welfare benefits; and (3) clarified the LIHEA program's crisis assistance component rules. GAO found that: (1) many states significantly decreased weatherization expenditures in response to the changes; (2) states only minimally changed their expenditures for heating and crisis assistance; (3) states are continuing to transfer LIHEA funds to other block grant programs, especially those that the Social Services Block Grant funds; (4) most states expected to continue to increase their program administration expenditures; and (5) some states had to expand eligibility criteria to comply with the new requirements. GAO also found that: (1) some states absorbed funding reductions of up to 11.7 percent under the act; (2) pursuant to that act's requirements, the Department of Health and Human Services reduced its fiscal year 1986 LIHEA budget by 4.3 percent; and (3) most states intended to reduce weatherization, heating, crisis assistance, administration, and transfer expenditures to meet the act's requirements. In addition, GAO found that: (1) the Department of Energy released almost $2.1 billion to the states after it collected that amount in an oil overcharge settlement, but the states were responsible for determining how those funds should be spent; and (2) the level of federal LIHEA funding is likely to determine how states allocate the settlement funds.